Inditex Group

Inditex Group
Spain
Cementerio de la isla de Tabarca, Alicante. España
Inditex headquarters at Arteixo (A Coruña - Spain). © Inditex
Inditex is one of the main fashion distributors in the world; it has
eight commercial brands (Zara, Pull and Bear, Massimo Dutti,
Bershka, Stradivarius, Oysho, Zara Home and Uterqüe) and over
6,000 stores in 86 countries, where the company has succeeded
in instilling the same corporate culture.
The Group includes over a hundred companies linked to the
different activities making up the design, manufacturing and
textile distribution business.
The company’s way of understanding fashion -creativity, quality
design and a quick response to market demands- has enabled
rapid international expansion and the eager acceptance of what
the different chains offer.
The first Zara shop opened in A Coruña (Spain) in 1975, where
the Group started up its activity and where the company’s
headquarters are located.
The Group employs an international staff of over 110,000
professionals spread over the whole world -60% of the personnel
work outside Spain. About 80% of them are women- and they are
young, their average age being 26.
34 /
64_trebol_ing.indd 34
64 / 2013
26/02/13 17:38
“Passion for fashion
has no borders”
A commitment to internationalization has been part of the Inditex Group’s personality right
from the start. Expansion outside Spain began in Portugal in 1988 and since then the Group
has never stopped growing abroad.
Inditex handles each phase of the fashion process:
design, manufacturing, logistics and sales in its
own stores. “The business model aims for flexibility
and agility: the capacity to adapt the fashion on
offer to clients’ wishes in the shortest possible
time. Vertical integration makes for shortening
of deadlines and provides the flexibility needed to
respond more precisely to demand.”
Furthermore, in order to get closer to different
types of customer, Inditex runs eight different
brand names: Zara, Pull and Bear, Massimo
Dutti, Bershka, Stradivarius, Oysho, Zara
Home and Uterqüe. “All the chains share
the same business model, the philosophy of
how to do things and the Group’s corporate
culture”.
The store is the
meeting point
with the customer,
the main source
of information for
the design teams
and the centre
around which all
the company’s
departments
revolve
zara.com photo shoot © Inditex
64 / 2013 /
64_trebol_ing.indd 35
35
26/02/13 17:38
The success of the collections
The models for each campaign are developed entirely by the
different chains’ creative teams, over 300 designers, whose
main source of information are the customers themselves
and their shopping decisions in the stores. “The success of
the collections depends on the capacity to recognize and
assimilate the constant changes in fashion trends, which
take place every single day. The designers’ aim is to catch
this spirit, to be able to provide new models at all times to
meet customers’ wishes.”
In some cases they have their products made by external
suppliers. Supervision of their work is a global task involving
all who feature in the value chain, from the purchasing to
the sales teams via the social responsibility units. “Quite
naturally, manufacturers of products sold by Inditex are
obliged to fulfil the Manufacturers’ and Suppliers’ Code
of Conduct, and to verify that the requirements are met,
through a system of regular audits carried out by Inditex
or high-level independent auditors. The quality required
in the three specific certification standards is very high,”
says the Inditex Communication and Institutional Relations
Department.
36 /
64_trebol_ing.indd 36
64 / 2013
26/02/13 17:38
International expansion
The commitment to internationalization has
formed part of the company’s personality right
from the start. Inditex’s expansion outside
Spain began in Portugal in 1988. The Group
currently has over 6,000 stores in 86 different
countries. “Thanks to the current strategy,
the Group has a significant global presence,
taking advantage of all opportunities both in
Europe and in the different Americas markets
and Asia. We should add to this the firm
commitment to electronic trade, which also
has a global reach”.
The usual scheme for advancing in a new
market consists of no more than “going from
store to store, listening to the customers and
steering which fashion they might be interested
in.” In most cases, Zara has been the first chain
to culminate “gathering experience”, which has
also enabled “faster international expansion of
the more recently created chains.”
Prominent among recent openings are stores
in line with the new Zara concept in both
Fifth Avenue in New York and Oxford Street in
London, the entry of Massimo Dutti into the
North American market with the opening of its
new store image, also on Fifth Avenue in New
York, the launching of Stradivarius in Mexico
and the arrival of Zara Home in Colombia and
Brazil. “Success among people, cultures and
generations, which in spite of their differences
share a special sensibility for fashion, resides
in the conviction that there are no borders
to prevent them from sharing the same
culture of clothing. Passion for fashion, quite
emphatically, has no borders”.
Europe is still one
of the main areas
of expansion
for Inditex, while
the company is
progressively
increasing its
presence in the
Americas and
continuing to
establish itself
in the Asian
markets
Plans for growth
Inditex makes the most of opportunities for
growth in any of the geographical areas where
it operates. In this regard, “Europe is still one
Zara Woman design team members. © Inditex
64 / 2013 /
64_trebol_ing.indd 37
37
26/02/13 17:38
e-business, ongoing expansion
Since 2011, all the Group chains have been selling on the Internet
and “the number of countries in which this possibility is available for
our customers is constantly growing.”
Inditex considers on-line sales to be a new service for its customers.
“We are highly focused on the ongoing improvement of the
commercial transaction in this new channel, so that customers can
enjoy the exact same service quality in this environment as they do
in physical stores. Both channels are complementary, both from the
customers’ point of view and in the commercial formats.”
Zara started on-line sales in China last September and Massimo
Dutti and Zara Home did so in the USA in October. The goal is to
“extend e-business to the markets where the company operates with
actual stores.”
Each store places
an order twice a
week and the time
lapse between the
ordering and the
arrival of the goods
in the shop is, on
average, 24 hours
for European stores
and a maximum
of 48 hours for
stores in the
Americas and Asia
Zara shop. Chicago - USA. © Inditex
38 /
64_trebol_ing.indd 38
64 / 2013
26/02/13 17:38
of the main areas of expansion for Inditex,
while the company is progressively increasing
its presence in the Americas and continuing to
establish itself in the Asian markets.”
Some 60% of Inditex staff work outside Spain,
but location does not matter; “corporate
culture responds to recognized and valid
criteria in all the countries where Inditex
is present, and it is based on teamwork,
overcoming difficulties, unrelenting hard
work, open communication and a permanently
high level of demand.”
Stores: location and management
The store is the key piece in the Inditex
business model. As the meeting point with the
customer, it is the main source of information
for the design teams and the centre around
which all the company’s departments revolve.
Today we can find Zara shops, for example, in
the main commercial arteries worldwide, and in
shopping centres that fulfil the selective Inditex
criteria, “always in places that guarantee
visibility and accessibility.”
The eco-efficient
store is a new
model in the way
that it conceives
commercial
spaces within the
distribution sector,
with pioneering
elements regarding
light, fixtures
and fittings,
recyclability and
waste management
Bershka shop. Tokyo - Japan. © Inditex
64 / 2013 /
64_trebol_ing.indd 39
39
26/02/13 17:38
View of one of Zara’s factories in Arteixo. ©Inditex
The company’s
young age and sense
of responsibility
have doubtless
moulded a character
that is permanently
oriented towards
environmental
management
40 /
64_trebol_ing.indd 40
In some cases, in privileged locations “a part of
cities’ historical heritage is recovered with detailed
projects for restoring unique spaces”. In addition,
stores have to be located in places with “suitable
surface and facade characteristics, for example,
to enable each of the brand names to present its
collections to customers in the right way”.
Centralized distribution
The main development strategy for Inditex
commercial brands is to open their own stores those in which Inditex holds all or the majority of
the share capital. But in markets of limited size,
Inditex Group has expanded its store network
by means of franchise agreements with local
companies that are leaders in the retail sector.
Another of Inditex’s strong points is distribution. Over 50% of the Group’s production is manufactured locally, basically in Spain and Portugal, and “both this production and the rest,
regardless of its origin, goes to the logistics
centres of each chain in Spain, from which it is
distributed to all the stores.”
“At all events, franchise stores account for
a very small percentage of the whole. The
main characteristic of the franchise model,
from the business point of view, is the total
integration of the franchise store business
Each store places an order twice a week and
the time lapse between the ordering and the
arrival of the goods in the shop is, on average,
24 hours for European stores and a maximum
of 48 hours for stores in the Americas and Asia.
management, which ensures the necessary
homogeneity in the global Inditex image for
customers in any country in the world.”
64 / 2013
26/02/13 17:38
Inditex is deeply
committed to
investing in
infrastructures in
Spain, from where
it sustains the
global projection
of the eight chains,
permitting the
incorporation of
maximum added
value with regard
to both human
talent and
technology
Pattern designing at Zara’s factory in Arteixo. ©Inditex
Moreover, “every shipment always includes
new models, which means that the stores can
always offer their customers a renewed offer”.
Investment in Spain
The Group’s commercial activity in Spain is
stable, “which is appropriate for a market
where growth in the sales-floor surface
area is selective. Spain is a country that the
Group knows very well and one in which it
feels very comfortable”.
Inditex is currently deeply committed to
investing in infrastructures in Spain, from
where it sustains “the global projection of
the eight chains, fostering the incorporation
of maximum added value with regard to both
human talent and technology”.
This investment policy in the Spanish market
has recently yielded three milestone events:
the enlargement of the headquarters in Arteixo
(A Coruña), which will increase the capacity of
the commercial area of Zara and Zara Home by
70,000 square metres, the construction of the
new logistics centre for Massimo Dutti in Tordera
(Barcelona), which incorporates state-of-the-art
technological innovation, and the acquisition of a
300,000 square metre plot of land in Guadalajara
to build a new international logistics centre that
will be in operation at the end of 2013.
In figures, “this policy involves an investment of
EUR 450 million in Spain and a capacity to generate
1,400 direct new jobs”. The motivation for all this is
to enable the Group to maintain its ranking as a
leader in the fashion distribution business, without
losing sight of the social and environmental
commitment inherent in its activities, and for the
benefit of all its interest groups.
64 / 2013 /
64_trebol_ing.indd 41
41
26/02/13 17:38
Insurance, a guarantee providing “experience and solvency”
Social Corporate Responsibility is embodied
with the company’s business model. “It is a
priority for Inditex to ensure the sustainability
of the production line and to play a pioneering
role in that area, by implementing dynamic
measures both to fulfil the Manufacturers
and External Workshops’ Code of Conduct, in
force since 2001, and for the ongoing pursuit
of the best quality standards”.
We should not forget that the Group
operates in 86 different countries, “and so it
is well aware of the most demanding quality
requirements in the whole world, and it
makes the most of this experience to be at
the service of its clients globally. All Group
teams work to accomplish this task”.
Inditex is fully committed to environmental
management in every aspect of the business.
“The company’s young age and sense of
responsibility have doubtless moulded a
character that is permanently oriented in this
direction”.
This motivation is what has led the company
to develop the eco-efficient store concept.
According to the Inditex Communication
and Institutional Relations department, this
model is “completely new in the way that
it conceives commercial spaces within the
distribution sector, with pioneering elements
regarding light, fixtures and fittings,
recyclability and waste management.
In short, each activity within the Group’s
value chain is considered in relation to its
environmental variable both in planning and
development.” Furthermore, the company
promotes environmental awareness in
internal training courses, and externally for
suppliers and collaborators.
But what does the insurance sector
contribute to a group like Inditex and how
does it accompany them in their national
and international development? “Risk
management is a highly important area
in any organization, and all the more for
Inditex, bearing in mind the complexity and
geographical scope of its operations. In this
regard, it is a guarantee for the Group to
collaborate with leading companies in the
sector that can contribute their experience
and solvency in this area”.
Manufacturers
of products sold
by Inditex are
obliged to fulfil the
Manufacturers’
and Suppliers’
Code of Conduct
and to verify that
the requirements
are met, through a
system of regular
audits carried out
by Inditex or highlevel independent
auditors
Ironing process at one of the Group`s factories. ©Inditex
42 /
64_trebol_ing.indd 42
64 / 2013
26/02/13 17:38